VA's McKesson PPV Contract: $33.7M in FY16 for Pharma Prep Mfg in Florida

Contract Overview

Contract Amount: $33,713,851 ($33.7M)

Contractor: Mckesson Corporation

Awarding Agency: Department of Veterans Affairs

Start Date: 2016-09-01

End Date: 2016-09-30

Contract Duration: 29 days

Daily Burn Rate: $1.2M/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EXPRESS REPORT: PHARMACY PRIME VENDOR (PPV) FY2016 SEP

Place of Performance

Location: BAY PINES, PINELLAS County, FLORIDA, 33744

State: Florida Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $33.7 million to MCKESSON CORPORATION for work described as: EXPRESS REPORT: PHARMACY PRIME VENDOR (PPV) FY2016 SEP Key points: 1. Contract awarded to McKesson Corporation for pharmaceutical preparation manufacturing. 2. Significant spending of $33.7M in FY16 highlights reliance on this vendor. 3. Full and open competition was utilized, suggesting a competitive bidding process. 4. The contract is a delivery order under a larger prime vendor program. 5. Located in Florida, indicating regional focus for this pharmaceutical supply.

Value Assessment

Rating: good

The contract's firm fixed price structure provides cost certainty. Benchmarking against similar pharmaceutical supply contracts would offer further insight into value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

Full and open competition was employed, allowing multiple bidders to participate. This method generally promotes competitive pricing and ensures fair market value.

Taxpayer Impact: The competitive nature of the award suggests taxpayers likely received fair pricing for pharmaceutical supplies.

Public Impact

Ensures access to essential pharmaceuticals for veterans. Supports the operational needs of VA medical facilities. Contributes to the pharmaceutical supply chain within the region. Potential impact on local employment through McKesson's operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if PPV is the sole distribution method.
Reliance on a single large corporation for critical supplies.
Geographic concentration in Florida may limit broader distribution options.

Positive Signals

Utilized full and open competition.
Firm fixed price contract provides cost predictability.
Supports a critical healthcare need for veterans.

Sector Analysis

This contract falls within the pharmaceutical preparation manufacturing sector, crucial for healthcare. Spending benchmarks for similar government pharmaceutical contracts vary widely based on volume and specific drug types.

Small Business Impact

While this specific contract is with a large corporation (McKesson), the broader Pharmacy Prime Vendor program may involve subcontracting opportunities for smaller businesses in logistics and distribution.

Oversight & Accountability

The Department of Veterans Affairs oversees this contract. Accountability is maintained through contract performance monitoring and adherence to federal procurement regulations.

Related Government Programs

Pharmaceutical Preparation Manufacturing
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

High contract value.
Single large vendor reliance.
Potential for supply chain disruption.
Geographic concentration.
Critical healthcare service.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $33.7 million to MCKESSON CORPORATION. EXPRESS REPORT: PHARMACY PRIME VENDOR (PPV) FY2016 SEP

Who is the contractor on this award?

The obligated recipient is MCKESSON CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $33.7 million.

What is the period of performance?

Start: 2016-09-01. End: 2016-09-30.

What is the total value of the Pharmacy Prime Vendor program across all years?

The provided data only details FY2016 spending for a specific delivery order. To determine the total value of the Pharmacy Prime Vendor program across all years, a comprehensive review of historical contract awards and modifications would be necessary. This would involve accessing contract databases and analyzing cumulative obligations.

Are there any identified risks associated with McKesson Corporation's performance under this contract?

The provided data does not specify any performance issues or risks related to McKesson Corporation for this particular contract. However, general risks for large pharmaceutical vendors include supply chain disruptions, price fluctuations, and regulatory compliance challenges. A thorough review of past performance reports and any issued cure notices would be needed for a complete risk assessment.

How does the pricing of this contract compare to market rates for similar pharmaceutical preparations?

The contract utilizes a firm fixed price, awarded through full and open competition. While this suggests competitive pricing, a direct comparison to market rates would require detailed analysis of the specific pharmaceutical products procured, their quantities, and prevailing market prices at the time of award. Benchmarking against other government contracts for similar items would also be informative.

Industry Classification

NAICS: Manufacturing › Pharmaceutical and Medicine Manufacturing › Pharmaceutical Preparation Manufacturing

Product/Service Code: MEDICAL/DENTAL/VETERINARY EQPT/SUPP

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: ONE POST ST, SAN FRANCISCO, CA, 94104

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $33,713,851

Exercised Options: $33,713,851

Current Obligation: $33,713,851

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA797P12D0001

IDV Type: IDC

Timeline